Moldova, located between Ukraine and Romania, has been living with a looming threat for decades. With almost no military, the country is in a state of frozen conflict with Transnistria, a breakaway region affiliated with Russia. Now, Moldova is struggling with the consequences of Russia’s full-scale invasion into Ukraine and a potential escalation to its own territorial conflict.
“Every tenth child in Moldova is a refugee,” says Daniel Voda, the Head of the Public Diplomacy and the Strategic Communication and Press Relations Division at the Ministry of Foreign Affairs and European Integration, “Our population grew by almost 4% during less than 3 months.”
Voda is referring to a tremendous flow of Ukrainians as more than 400 thousand have crossed the Moldovan border since February 24. 100,000decided to stay.
This has added a new burden to an already constrained Moldovan economy. The country is very dependent on both Russia and Ukraine for its imports, especially raw materials. Russia also remains Moldova’s main energy supplier. For that reason, Chisinau claimed neutrality and decided not to impose sanctions against the Kremlin although it had de-facto implemented them. For example, there is no aerial connection between Russia and Moldova, the country is no longer importing Russian goods except for gas, and the government also manually ended contracts with Russian companies – even though it avoided officially sanctioning them. In addition, Moldova banned Z and V signs and other pro-Russian symbols.
The war also made Moldova keener to pursue its EU aspirations. The country has submitted an official application forEU candidacy and continues adjusting its economy to meet the EU regulations. Currently, the EU is responsible for two thirds of the country’s exports, and local businesses are working on targeting the EU market – despite previous orientation on Russia.
However, this does not solve immediate problems. Since the war started, prices have increased by 3% monthly, with gas hiking in price by more than 130% according to the National Bureau of Statistics. Previously, Ukraine has been the main route for receiving Russian gas, but now, the Moldovan government is seeking another path to get the energy, potentially through Romania. This could lead to an additional price increase. The government is also expecting a drop in remittances as around 200,000 Moldovans living in Russia are already sending less money back home – they used to transfer around $130 million to Moldova per year.
“I already feel poorer, and business is getting tougher,” says Roman Mazur from Chisinau, “I stopped using my car because the fuel prices are crazy, and I have been trying to economize when buying groceries, but it’s tough because I have children.”
Mazur owns a flower shop in Moldovan capital. He says he feels insecure about his future and considers moving to Romania if things get worse – or if Moldova gets invaded.
All this comes as tensions between Moldovan government and Transnistria are on the rise. Transnistria hosts around 1,500 Russian troops and is a constant source of worry as it does not recognize the rule of the Moldovan government and claims to be an independent republic. A set of explosions took place in Tiraspol in April; local pro-Russian authorities blamed Ukraine for launching an attack on the region. According to Western intelligence, this may be a Russian attempt to involve its troops from Transnistria in the war against Ukraine – and Moldova.
Chisinau has reassured that there was no immediate threat from Transnistria. However, Moldovan President Maya Sandu called Russia to withdraw its troops from the region.
The situation remains difficult, and Moldova has requested additional help from the EU to tackle the refugee crisis and economic challenges which have resulted from the war. The EU has committed 150 million euros worth of loans and grants and provided an additional 8 million in the form of humanitarian aid. The US will also provide $30 million.
This, however, may not be enough. If the Russian war continues, nearly one third of Moldovans may drop below the poverty line – triple the current number.